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GAO: CMS erred in giving bonuses to lower-quality hospitals


Dive Brief:

  • Hospitals with low quality scores can still reap bonuses under CMS’ Hospital Value-Based Purchasing Program (HVBP) if they have high efficiency scores. That’s the gist of a new report from the Government Accountability Office.
  • The report, which reviewed the program from 2013 to 2017, raises questions about how the agency measures and rewards hospital performance.
  • A product of the Affordable Care Act, the HVBP provides financial incentives to hospitals that boost quality of care and increase workplace efficiencies.

Dive Insight:

The GAO recommends HHS rework its methodology for calculating total performance scores and the way hospital reports with missing score categories are handled, which is by giving higher weight to scores that are provided. Giving bonuses to lower quality hospitals, contradicts the CMS’ stated intention to reward higher quality hospitals. Since adding expedience as a metric in fiscal year 2015, there has not been a proper balance in scoring between those measures and quality measurers, the watchdog agency said. 

In their response, HHS officials said HVBP is “continuously evolving” and they will consider making the suggested changes.

According to the GAO review, 345 hospitals with quality scores below the median still received a bonus in 2017. A total of 1,264 hospitals had quality scores above the median and also received bonuses, while 1,343 hospitals received a penalty. The distribution was similar for years 2015 and 2016.

The analysis also found that smaller hospitals were more likely to receive bonuses and safety net hospitals were more likely to receive penalties.

Health policy experts have debated the value of HVBP. In November, CMS announced that more than 1,600 hospitals would receive a bonus in fiscal year 2017, while about 1,300 would receive a negative payment adjustment. The top performing hospitals stood to gain 4% in base pay.

However, a 2015 GAO report found that HVBP had minimal effect on quality. And more recently, a study in The New England Journal of Medicine concluded that clinical quality and patient experience measures did not improve under HVBP and the program did not yield “significant reductions” in two of three mortality measures.

But determining value can be difficult, because it means different things to different patients, providers and payers. This spring, a consortium of CEOs from Kaiser Permanente, Medtronic, Novartis and other organizations, as well as academics and government leaders called for a new approach to healthcare that embraces patient-centered care and focuses on outcomes.

Christina Boccuti, associate director of the Program on Medicare Policy at The Henry J. Kaiser Family Foundation, believes the jury on value-based care is still out. “Some initiatives are returning positive savings and positive quality results and others are more mixed,” she told Healthcare Dive in an interview last month.

For fiscal year 2018, hospitals will be scored equally on four metrics: clinical care, patient and caregiver experience, safety, and efficiency and cost reduction.


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